Infrastructure Bill Negotiations Likely to Drag on for Awhile, Analyst Says

WASHINGTON — Negotiations on the two infrastructure bills being considered in Congress — both of which contain health-related provisions — are likely to drag into the fall, according to one healthcare analyst.

“I don’t think it’s going to be September or October,” said Allison Orris, Washington-based counsel at Manatt Health, a professional services firm based in New York City. “I think we might have a long fall ahead of us.”

Two Bills Being Considered

Congress’s current action on infrastructure consists of two bills: the first, a $1 trillion bill focused on “hard” infrastructure such as rebuilding roads and bridges, passed in the Senate Aug. 10 on a bipartisan vote of 69-30, and contained two drug-related provisions mainly aimed at paying for the bills:

• The bill requires manufacturers of certain single-dose drugs covered under Medicare Part B to provide refunds for any drug product left over after a vial is used up. Proponents of this provision “will argue that the size of the vial is larger than it needs to be — and therefore the payment for the drug is higher — and there’s this excess that happens after you administer it to the patient,” explained Matthew Kazan, MPP, principal at Avalere, a healthcare consulting firm here. “The intent of the provision is to try to recoup some of those savings,” with the Congressional Budget Office estimating that the provision will save about $3 billion over the next 10 years, he said.

• The bill delays by 3 years implementation of a rule relating to prescription drug rebates. Currently, under an exception to the Stark anti-kickback laws, rebates paid by drug companies under the Part D program go to pharmacy benefit managers, which use them to decrease Part D premiums. The rebate rule, finalized by the Trump administration, would have forced the rebates to go directly to consumers.

“A court delayed implementation for a year, but it is still under current law set to take effect,” Kazan said.

This infrastructure bill — which the House has yet to vote on — delays implementation for 3 years, and “due to the rules of how the Congressional Budget Office works in score-keeping in Congress, that results in lower government spending,” he said. “So it is an offset that can be used.”

Kazan said he expects the rule to be delayed further under the second infrastructure bill “to capture even more savings.”

“The Senate’s ‘bipartisan’ infrastructure bill relied on healthcare provisions more for budget-scoring offset purposes than to dispense much in new resources to the healthcare sector,” Thomas Miller, JD, resident fellow at the American Enterprise Institute, a right-leaning think tank here, said in an email.

“The delayed implementation of eliminating the Stark rule safe harbor for Medicare Part D drug rebates was one modest cash cow … that could not be resisted. This bill also trimmed the generosity of earlier promises to spend more on home health care and restored some Medicare sequester rule cuts, while handing out a limited dose of new dollars for broadband infrastructure that arguably could benefit healthcare delivery to some degree. Mostly no big surprises, and just short of a late-afternoon yawn,” Miller said.

The ‘Soft’ and Bigger Bill

The second bill, still being negotiated, would cost around $3.5 trillion in its current incarnation, and is considered by Republicans to be a “soft” infrastructure bill because many provisions are unrelated to traditional infrastructure. For example, some of the healthcare-related provisions that Democrats are lobbying for include:

• Expanding traditional Medicare to include dental, vision, and hearing benefits; these are already offered by some Medicare Advantage plans but are not currently part of traditional fee-for-service Medicare

• Lowering the Medicare eligibility age to 60

• Allowing Medicare to negotiate prices for certain prescription drugs

• Creating a Medicaid-like program that would be available to low-income residents in states that haven’t yet expanded Medicaid

• Continuing Affordable Care Act (ACA) premium subsidies to help people pay for coverage in the ACA marketplace

On Aug. 11, the Senate passed a budget resolution along party lines by a vote of 50-49 that contained the basic outlines of this bill, but the actual bill text is still being negotiated, with a vote in each chamber expected in the coming weeks. This bill has support largely just from Democrats and is expected to be passed under “reconciliation” rules, which require only a majority vote rather than a larger veto-proof majority.

Which provisions seem more likely to pass? “Certainly, closing the Medicaid coverage gap is a big priority” of President Biden and congressional Democrats, said Orris. In addition, “continuing the American Rescue Plan Act premium subsidies to make marketplace coverage more affordable is front and center on the Democrats’ list,” but they’ll have to figure out how long it will be feasible to do so, she said.

On the other priorities, “I think that we’re likely to see some expansion of vision, dental, and hearing,” she said. “I don’t think it’s as likely that we’ll see a change in the Medicare eligibility age; that’s too expensive.”

Differing Views on Chances of Passage

Miller was skeptical of the “soft” reconciliation bill and the claims some Democrats are making that it can be paid for.

“If you can call this reconciliation bill an investment in ‘human infrastructure,’ why not also claim it might eventually pay for itself, albeit a long time ahead, in a galaxy far away,” he said. “The budget reconciliation pinãta game hopes to offer something for almost everyone, except for mostly hiding the future bills coming due to those who ultimately will have to pay for it … It’s less a matter of scrutinizing and calibrating the legislative details and not-so-fine print than really just once again trying to get a sprawling, overreaching grab bag of a bill out the door before the fiscal snooze alarm around the corner stops working.”

“The longer into the fall it goes, the harder it becomes, assuming Biden’s poll numbers continue to slip,” Miller continued. “Inflation fears, Afghan spillover, next-stage COVID execution problems, plus a faux revival of Republican rhetoric re [sounding a] fiscal alarm (when Democrats overspend instead of them) — plus whether a handful of holdout House Democrats balk at the simultaneous infrastructure bills versus the stark political realities of sinking or swimming together,” he said.

Kazan and Orris were more positive, with Orris saying she will “choose to be an optimist” about the bills’ passage. Kazan called the passage chances for both bills “high.”

For the first bill, “the full Senate has passed it on a bipartisan basis; I would assume that if it were called up in a vote today in the House, that it would get enough votes to pass,” Kazan said.

On the second bill, “Democrats are very motivated to do some of these healthcare provisions — for instance, the ACA provisions that were in the COVID bill expire in 2023, so people who are benefiting from that now will get notices in the mail in the fall of 2022, coincidentally right around the midterm elections,” he said. “Democrats aren’t wanting people to lose their coverage right around the midterm elections, so they’re going to want to take care of this ACA situation as soon as they possibly can.”